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MEMBER DIARY

CBO: 2011 Will Be Another Year of Record Deficits

We’re in deep trouble. There is simply no other conclusion you can take away from yesterday’s CBO Report.

In their “Budget and Economic Outlook,” the CBO said that the 2011 deficit will hit $1.48 trillion – nearly 40% higher than estimates the CBO made earlier in the year. That’s even larger than the $1.41 trillion deficit we racked up in 2009. It also represents the second highest percentage of the nation’s output since World War II, lagging only behind last year in terms of size.

How did we get to this point? As Rep. Paul Ryan explained in the Republican’s Response to the State of the Union:

There is no doubt the president came into office facing a severe fiscal and economic situation.

Unfortunately, instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree that not only failed to deliver on its promise to create jobs but also plunged us even deeper into debt.

The facts are clear: Since taking office, President Obama has signed into law spending increases of nearly 25 percent for domestic government agencies – an 84 percent increase when you include the failed stimulus.

All of this new government spending was sold as “investment.”

The CBO’s report and Rep. Ryan’s response, make President Obama’s demands for more “investment” all the more absurd. Our government should not be looking for more ways to spend, it should be looking for ways to save. The CBO has already warned that, “a growing level of federal debt would also increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget.”

Our growing debt has real consequences. On the one hand, the CBO predicts that large budget deficits would reduce national saving and domestic investment which “would lower income growth in the United States.” On the other hand, as the debt grows, it becomes increasingly more difficult to solve the problem without raising taxes to a level that would substantially harm our economy.

Without immediate action we are approaching a Catch-22 that inevitably leads to dampened economic growth.

So we urge you to call, write, or email your Congressman. Let them know that we cannot afford President Obama’s “investments.” As this year’s $1.5 trillion deficit attests, we simply must stop trying to spend our way out of this recession. It’s time we demand fiscal accountability in Washington, it is clear they are not going to do it on their own.